Arbat Prestige, the largest perfumery and cosmetic retail chain in Russia, may leave the market. Vladimir Nekrasov, owner of cosmetics retailer, was placed under arrest last week on suspicion of large-scale tax evasion. The arrest may undermine the business, say market experts.
Anna Dycheva, the vice-president of ExpoMediaGroup Staraya Krepost, commented: "Vladimir Nekrasov supervised personally over all business-processes in the company. It is not clear, who can replace him".
In the past several years Arbar Prestige performance was not as good as the company planned. In 2005 its turnover reached $240 mln (as compared to $445 mln planned), while in 2006 the turnover was $346 mln ($500 mln planned). As a result, Kurs group, managing L'Etoile and Sephora stores, took the leadership with $465 mln turnover in 2006. Bonds of Arbat &Co (the $57mln loan was issued in June 2006) fell in price to 97.5 % from face value.
Igor Denisov, the proprietor of Edinaya Evropa (the company develops Ile de Beaute, a close competitor of Arbat Prestige), considers: "Arbat Prestige is estimated at $1 bln. Nevertheless, if its management decides to sell the company, they can hardly find anybody to pay more than $400mln for the company's real estate and $150mln for the brand.
Arbat Prestige comprises 64 doors in Moscow, Saint Petersburg, Kazan and Voronezh. The turnover of the company was $346mln in 2006. ExpoMediaGroup Staraya Krepost estimates Arbat Prestige's share in the total sales through cosmetics retail chains at 15%.
Arbat Prestige was established in 1989 to deal in perfumery and cosmetics distribution. The first store was opened in 1998.
Learned from The Moscow Times
